We’ve been talking about rising mortgage payments for months now — and it’s no longer just a prediction. According to the latest Bank of Canada findings, nearly one-third of Canadian homeowners will see their mortgage payments increase by the end of 2026.
That’s a lot of people feeling the squeeze.
But here’s the interesting part — the same report suggests most Canadians have built a bit of a financial cushion over the past few years, which could help them weather these higher costs.
What’s Really Happening
Between 2019 and 2024, homeowners with mortgages actually saw their savings (or what economists call liquid assets) rise slightly — from about 4.7 months to 4.8 months of income. Renters also saw a bump, from 1.7 to 2 months.
These “liquid assets” include cash in chequing or savings accounts, GICs, ETFs, or investments that can be easily accessed — the kind of money that can bridge a financial gap when mortgage rates go up.
The Renewal Crunch Is Coming
The Bank of Canada estimates that about 60% of mortgages will be up for renewal in 2025 and 2026. That means millions of Canadians will soon face higher monthly payments due to the elevated mortgage renewal rates and persistent Bank of Canada interest rates.
While most households can use their savings to offset the increase, the report also notes that 1 in 10 borrowers would only have enough accessible cash to cover one month of higher payments. That’s a red flag for anyone living close to the edge.
What You Can Do Now
If your mortgage is up for renewal soon, here are a few smart ways to manage higher mortgage payments:
- Review your budget early. Understand how much your payment might rise and plan for it before renewal.
- Talk to your lender or broker. Explore extending your amortization or switching mortgage types if it helps balance monthly cash flow.
- Build or rebuild your savings buffer. Even one or two months of expenses in liquid form can make a big difference.
- Don’t ignore prepayment options. If you can make small lump-sum payments before renewal, you’ll reduce your balance and interest costs.
My Take
The good news? Most Canadians are in better shape than we might think — but not everyone has the same level of protection. If your savings aren’t where you want them to be, now’s the time to tighten up your finances before the renewal wave hits.
I’ve been helping many clients navigate these conversations — running the numbers, comparing renewal offers, and finding ways to stay financially comfortable even as rates rise.
If your mortgage renews in 2025 or 2026 and you’re unsure what your new payments might look like, let’s talk. I’ll help you plan for what’s next — without the surprises.
